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INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of the 18th day of
September, 1996, between THE PEREGRINE REAL ESTATE TRUST, a California business
trust (the "Trust") and _____________________ ("Agent").
RECITALS
1. The Restated Declaration of Trust of the Trust (the
"Declaration") contains provisions indemnifying the Trust's current and former
trustees, officers, employees or agents, and authorizing the Trust to enter
into individual indemnification agreements with any person entitled to be
indemnified by the Trust, without specific approval of the shareholders of the
Trust, subject to certain requirements as set forth in the Declaration;
2. The Bylaws of the Trust (the "Bylaws") contain provisions
indemnifying the Trust's current and former trustees, officers, or agents;
3. The Agent is currently serving as a trustee, officer, employee
or agent of the Trust;
4. The Board of Trustees of the Trust (the "Board") has
determined that it is in the best interests of the shareholders of the Trust
for the Trust to provide Agent with additional assurance of protection against
personal liability; and
5. This Agreement is being entered into pursuant to and in
furtherance of the Declaration and the Bylaws, as authorized by the Board.
NOW, THEREFORE, in consideration of the foregoing recitals and of
other good and valuable consideration, the receipt of which is acknowledged,
the parties agree as follows:
1. Indemnification.
(a) The Trust shall hold harmless and indemnify the Agent
against any and all expenses, liabilities and losses (including, without
limitation, investigation expenses and expert witnesses' and attorneys' fees
and expenses, judgments, penalties, fines, ERISA excise taxes and amounts paid
or to be paid in settlement) actually incurred by the Agent (net of any related
insurance proceeds or other amounts received by Agent or paid by or on behalf
of the Trust on the Agent's behalf), in connection with any action, suit,
arbitration or proceeding (or any inquiry or investigation, whether brought by
or in the right of the Trust, any subsidiary or affiliate of the Trust, or
otherwise, that Agent in good faith believes might lead to the institution of
any such action, suit, arbitration or proceeding), whether civil, criminal,
administrative or investigative, or any appeal therefrom, in which the Agent is
a party, is threatened to be made a party, is a witness or is participating (a
"Proceeding") based upon, arising from, relating to, or by reason of the fact
that Agent was a trustee, officer, employee or agent of the Trust, whether or
not arising prior to the date of this Agreement;
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(b) If Agent is entitled under this Agreement to
indemnification by the Trust for some or a portion of the Indemnified Amounts
(defined below) but not, however, for all of the total amount thereof, the
Trust shall nevertheless indemnify Agent for the portion thereof to which Agent
is entitled.
2. Limitations on Indemnification. Notwithstanding any other
provision of this Agreement, Agent shall not be entitled to indemnification
under Section 1:
(a) if the claim, obligation or liability with respect to
which indemnity is sought shall have been determined by a court of competent
jurisdiction, by a final judgment or decree, or, in case of settlement, which
in the opinion of counsel for the Trust would, if determined by a court of
competent jurisdiction, likely have been determined to have arisen out of or
been based upon Agent's willful misfeasance, bad faith, gross negligence or
reckless disregard of duty or for Agent's failure to act in good faith in the
reasonable belief that Agent's action was in the best interests of the Trust;
(b) if a court of competent jurisdiction shall determine,
by a final judgment or decree, that such indemnity is not permitted under
applicable law;
(c) on account of any suit in which judgment is rendered
for an accounting of profits made from the purchase or sale by Agent of
securities of the Trust in violation of the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, sate or local statutory law; or
(d) on account of any suit brought against Agent for
misuse or misappropriation of non-public information, or otherwise involving
Agent's status as an "insider" of the Trust in connection with any purchase or
sale by Agent of securities of the Trust.
3. Other Indemnification Arrangements. The Trust's purchase,
establishment and maintenance of insurance or similar protection or other
arrangements, including, but not limited to, providing a trust fund, letter of
credit, or surety bond ("Indemnification Arrangements") on behalf of the Agent
against any liability asserted against him or her or incurred by or on behalf
of him or her in such capacity as a trustee, officer, employee or agent of the
Trust, or arising out of his or her status as such, whether or not the Trust
would have the power to indemnify him or her against such liability under the
provisions of this Agreement or under applicable law, shall not in any way
limit or affect the rights and obligations of the Trust or of the Agent under
this Agreement except as expressly provided herein, and the execution and
delivery of this Agreement by the Trust and the Agent shall not in any way
limit or affect the rights and obligations of the Trust or the other party or
parties thereto under any such Indemnification Arrangement. All amounts
payable by the Trust pursuant to this Section 3 and to Section 1 of this
Agreement are herein referred to as "Indemnified Amounts."
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4. Advance Payment of Indemnified Amounts.
(a) The Agent hereby is granted the right to receive in
advance of a final, nonappealable judgment or other final adjudication of a
Proceeding (a "Final Determination") the amount of any and all expenses,
including, without limitation, investigation expenses, expert witnesses' and
attorney's fees and other expenses expended or incurred by the Agent in
connection with any Proceeding or otherwise expended or incurred by the Agent
(such amounts so expended or incurred being referred to as "Advanced Amounts").
(b) In making any written request for Advanced Amounts,
the Agent shall submit to the Trust a schedule setting forth in reasonable
detail the dollar amount expended or incurred or an estimate of the current
dollar amount expected to be expended. Each such listing shall be supported by
the xxxx, agreement, or other documentation relating thereto (if reasonably
available at that time). In addition, before the Agent may receive Advanced
Amounts from the Trust, the Agent shall provide to the Trust (i) a written
affirmation of the Agent's good faith belief that the applicable standard of
conduct required for indemnification by the Trust under this Agreement has been
satisfied by the Agent, and (ii) a written undertaking by or on behalf of the
Agent to repay the Advanced Amount if it shall ultimately be determined that
the Agent has not satisfied the applicable standard of conduct. The written
undertaking required from the Agent shall not be secured. The Company shall
pay to the Agent all Advanced Amounts within five (5) days after receipt by the
Trust of all information and documentation required to be provided by the Agent
pursuant to this paragraph.
5. Procedure for Payment of Indemnified Amounts.
(a) To obtain indemnification under this Agreement, the
Agent shall submit to the Trust a written request for payment of the
appropriate Indemnified Amounts, including with such requests such
documentation and information as is reasonably available to the Agent and
reasonably necessary to determine whether and to what extent the Agent is
entitled to indemnification.
(b) The Company shall pay the Agent the appropriate
Indemnified Amounts unless it is established that the Agent has not met any
applicable standard of conduct provided in this Agreement or applicable law.
For purposes of determining whether the Agent is entitled to Indemnified
Amounts, in order to deny indemnification to the Agent the Trust has the burden
of proof in establishing that the Agent did not meet the applicable standard of
conduct. In this regard, a termination of any Proceeding by judgment, order or
settlement does not create a presumption that the Agent did not meet the
requisite standard of conduct; provided, however, that the termination of any
criminal proceeding by conviction, or a pleading of nolo contendere or its
equivalent, or any entry of an order of probation prior to judgment, creates a
rebuttable presumption that the Agent did not meet the applicable standard of
conduct.
(c) Any determination that the Agent has not met the
applicable standard of conduct required to qualify for indemnification shall be
made either (i) by the Board of
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Directors by a majority vote of a quorum consisting of directors who were not
parties of such action, suit or Proceeding; or (ii) by independent legal
counsel (who may be the outside counsel regularly employed by the Trust);
provided that the manner in which (and, if applicable, the counsel by which)
the right to indemnification is to be determined shall be approved in advance
in writing by both the highest ranking executive officer of the Trust who is
not party to the Proceeding (sometimes hereinafter referred to as "Senior
Officer") and by the Agent. In the event that such parties are unable to agree
on the manner in which any such determination is to be made, such determination
shall be made by independent legal counsel retained by the Trust especially for
such purpose, provided that such counsel be approved in advance in writing by
both the said Senior Officer and Agent, and provided further that such counsel
shall not be outside counsel regularly employed by the Trust. The fees and
expenses of counsel in connection with making said determination contemplated
hereunder shall be paid by the Trust, and, if requested by such counsel, the
Trust shall give such counsel an appropriate written agreement with respect to
the payment of their fees and expenses and such other matters as may be
reasonably requested by counsel.
(d) The Company will use its best efforts to conclude as
soon as practicable any requested determination pursuant to subparagraph (c)
above and promptly will advise the Agent in writing with respect to any
determination that the Agent is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has
been denied. Payment of any applicable Indemnified Amounts will be made to the
Agent within ten (10) days after any determination of the Agent's entitlement
to indemnification.
(e) Notwithstanding the foregoing, Agent may, at any time
after sixty (60) days after a claim for Indemnified Amounts has been filed with
the Trust (or upon receipt of written notice that a claim for Indemnified
Amounts has been rejected, if earlier) and before three (3) years after a claim
for Indemnified Amounts has been filed, petition a court of competent
jurisdiction to determine whether the Agent is entitled to indemnification
under the provisions of this Agreement, and such court shall thereupon have the
exclusive authority to make such determination unless and until such court
dismisses or otherwise terminates such action without having made such
determination. The court shall, as petitioned, make an independent
determination of whether the Agent is entitled to indemnification as provided
under this Agreement, irrespective of any prior determination made by the Board
or Directors or independent counsel. If the court shall determine that the
Agent is entitled to indemnification as to any claim, issue or matter involved
in the Proceeding with respect to which there has been no prior determination
pursuant to this Agreement or with respect to which there has been a prior
determination that the Agent was not entitled to indemnification hereunder, the
Trust shall pay all expenses (including attorneys' fees) actually incurred by
the Agent in connection with such judicial determination.
(f) Nothing set forth in this Section 5 shall limit or
affect the timing or amount, or the right of Agent to payment, of any Advanced
Amounts pursuant to Section 4 hereof.
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6. Agreement Not Exclusive: Subrogation Rights, etc.
(a) This Agreement shall not be deemed exclusive of and
shall not diminish any other rights the Agent may have to be indemnified or
insured or otherwise protected against any liability, loss, or expense by the
Trust, any subsidiary of the Trust, or any other person or entity under any
charter, bylaws, law, agreement, policy of insurance or similar protection,
vote of stockholders or directors, disinterested or not, or otherwise, whether
or not now in effect, both as to actions in the Agent's official capacity with
the Trust, and as to actions in another capacity while holding such office,
including Agent's right to contribution as may be available under applicable
law. The Company's obligations to make payments of Indemnified Amounts
hereunder shall be satisfied to the extent that payments with respect to the
same Proceeding (or part thereof) have been made to or for the benefit of the
Agent by reason of the indemnification of the Agent pursuant to any other
arrangement made by the Trust for the benefit of the Agent.
(b) In the event the Agent shall receive payment from any
insurance carrier or from the plaintiff in any Proceeding against such Agent in
respect of Indemnified Amounts after payments on account of all or part of such
Indemnified Amounts have been made by the Trust pursuant hereto, such Agent
shall promptly reimburse to the Trust the amount, if any, by which the sum of
such payment by such insurance carrier or such plaintiff and payments by the
Trust or pursuant to arrangements made by the Trust to Agent exceeds such
Indemnified Amounts; provided, however, that such portions, if any, of such
insurance proceeds that are required to be reimbursed to the insurance carrier
under the terms of its insurance policy, such as deductible or co-insurance
payments, shall not be deemed to be payments to the Agent hereunder. In
addition, upon payment of Indemnified Amounts hereunder, the Trust shall be
subrogated to the rights of Agent receiving such payments (to the extent
thereof) against any insurance carrier (to the extent permitted under such
insurance policies) or plaintiff in respect of such Indemnified Amounts and the
Agent shall execute and deliver any and all instruments and documents and
perform any and all other acts or deeds which the Trust deems necessary or
advisable to secure such rights. Such right of subrogation shall be terminated
upon receipt by the Trust of the amount to be reimbursed by the Agent pursuant
to the first sentence of this paragraph.
7. Insurance. In the event that the Trust maintains directors'
and officers' liability insurance to protect itself and any of its directors or
officers against any expense, liability or loss, such insurance shall cover the
Agent to at least the same extent as any other director or officer of the
Trust, provided that nothing in this Agreement shall require the Trust to
obtain coverage relating to any acts occurring prior to the date hereof.
8. Severability. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provisions hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
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9. Further Assurances. The parties will do, execute and deliver,
or will cause to be done, executed and delivered, all such further acts,
documents and things as may be reasonably required for the purpose of giving
effect to this Agreement and the transactions contemplated hereby.
10. Successors: Binding Agreement. This Agreement shall be
binding on and shall inure to the benefit of and be enforceable by the Trust's
successors and assigns and by the Agent's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. The Company shall require any successor or assignee (whether direct
or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or asserts of the Trust, by written agreement
in form and substance reasonably satisfactory to the Trust and to the Agent,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Trust would be required to perform if no such
succession or assignment had taken place.
11. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
12. Miscellaneous. No provision of this Agreement may be
modified, waived, or discharged unless such modification, waiver, or discharge
is agreed to in writing signed by Agent and either the Chairman of the Board or
the President of the Trust or another officer of the Trust specifically
designated by the Board. No waiver by either party at any time of any breach
by the other party of, or of compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or at any prior
or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The
validity, interpretation, construction, and performance of this Agreement shall
be governed by the laws of the State of California, without giving effect to
the principles of conflict of laws thereof. The Agent may bring an action
seeking resolution of disputes or controversies arising under or in any way
related to this Agreement in the state or federal court jurisdiction in which
Agent resides or in which his or her place of business is located, and in any
related appellate courts, and the Trust consents to the jurisdiction of such
courts and to such venue.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AGENT: THE PEREGRINE REAL ESTATE TRUST
By:
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Name:
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Title:
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